Bitcoin news

Bitcoin and ether face a major quarterly options expiry on Friday, with roughly $15.9 billion in BTC and $2.1 billion in ETH contracts due on Deribit. The bitcoin expiry reduces about 37% of the exchange's open interest, and the book is heavily biased toward bullish calls, with a put/call ratio of 0.69 and over half of the $9.4 billion in call notional currently in the money. Market observers say the expiry could reset Bitcoin's trading range after a rally from $80,000 to $87,000 was partly amplified by dealer hedging of short call positions. Once that hedging flow clears, short-term volatility may rise and the 'pinning' effect near current prices could fade. The maximum pain level for bitcoin is $75,000, with notable call interest at strikes between $85,000 and $100,000 and put support at $60,000 to $75,000.

Bitcoin surpassed $86,500 on Tuesday, up about 14% on the week, pushing the total crypto market cap above $3 trillion. Spot Bitcoin ETFs saw nearly $1 billion in net inflows on Monday, the biggest day since October 2025. Ethereum reached $2,750, Solana hit $120, and several altcoins, including Zcash and HYPE, reached all-time highs. The rally coincided with a drop in oil prices after reports that Iran offered to reopen the Strait of Hormuz, and with Wall Street strength, as the Nasdaq closed at a record. The newsletter also highlights growing regulatory clarity from the SEC and CFTC, a tokenization boom, and notes that CME will launch Bitcoin Cash and Uniswap futures on October 19.

Bitcoin has risen about 13% since the Federal Reserve's September 16 rate hike, with Wall Street funds driving the buying. Analysts cite three reasons: the rate increase was already priced in, the move no longer scares buyers, and technical charts showed room for growth. The CLARITY Act's failure in the Senate and the rate hike were absorbed by the market. Spot Bitcoin ETFs took in $2.31 billion over four days, fueling two major up days on September 18 and 21. The surge also triggered short liquidations, adding to demand. The buying pushed Bitcoin out of an inverse head-and-shoulders pattern, breaking a key neckline. The next hurdle is $86,935; a daily close above could open $89,825 and then $93,940, with a potential measured move to $117,247. Support lies near $84,569, where a large supply band sits. A daily close below $84,045 would bring the neckline at $82,000 back into play. Analysts note that funds bought even with yields near their September high, suggesting rate fears have faded, with August inflation data on September 30 as the next potential test.

Coinbase has launched fixed-rate bitcoin-backed loans in USDC, allowing users to borrow the stablecoin against their bitcoin holdings with interest rates and repayment dates set at origination. The service runs on Morpho Midnight, a noncustodial lending protocol, and settles on Coinbase's Ethereum layer 2 network, Base. This complements Coinbase's existing variable-rate lending business, which has over $1.4 billion in active loans backed by nearly $3 billion in collateral. The bitcoin-backed credit market is currently valued at roughly $16 billion and could grow to $130 billion by 2030, according to industry estimates. A survey of 1,244 crypto holders found that 88% would consider taking out a crypto-backed loan.

US spot Bitcoin ETFs attracted over $1.7 billion in net inflows over two days, with $999 million on Monday and $715 million on Tuesday, according to SoSoValue. The surge came as Bitcoin traded above the estimated average ETF holder cost basis of $81,722 per coin, marking the first time since January that holders were back in profit. Total net assets across these funds reached about $111 billion, up 56% from a 2026 low but still 13% below the January high. BlackRock's IBIT led Tuesday's inflows with $350 million, followed by Fidelity's FBTC at $257 million and Grayscale Bitcoin Mini Trust at $99 million. Bitcoin traded around $86,000 on Tuesday, later reaching $86,467, up 1.2% over 24 hours and 13.8% over the week, as the broader crypto market reclaimed a $3 trillion capitalization.

Bitcoin ETFs absorbed nearly $1 billion on Monday, Sept. 21, but the price surge that day was triggered by a short squeeze, according to CoinGlass, raising questions about whether ETF flows are driving the rally or chasing it. Data suggests the derivatives market provided the initial spark, with ETF inflows historically tracking price movements rather than leading them. Bitcoin dipped while ETFs saw outflows between Sept. 9-16, while flows turned positive as prices resumed climbing. The BlackRock iShares Bitcoin Trust holds over four times more BTC than Fidelity's fund, indicating capital concentration that resembles trend-chasing. While ETF demand adds buying pressure and can extend a rally, the data for this leg shows futures moved first, with Wall Street money arriving afterward.

Bitcoin recovered above $86,000 after absorbing a Federal Reserve rate hike and the Senate's failed CLARITY Act vote, according to BitGo Research, which argued the muted reaction signaled negative news was being absorbed into digital asset prices. The Fed raised rates by 25 basis points on Sept. 16, with projections indicating further increases, while the CLARITY Act failed a procedural vote on Sept. 15. Bitcoin initially fell toward $75,000 before recovering, later climbing above $86,000 on Sept. 23. The rebound coincided with renewed spot ETF inflows, including $999 million on Sept. 21, lower Treasury yields, and short covering. BitGo noted Bitcoin behaved differently than traditional assets, though analysts cautioned that sustained spot demand is needed to confirm the move.

Neoclassic Capital co-founder Michael Bucella said Bitcoin's rally is driven by investors seeking hedges against US currency debasement, rather than by policy developments in Washington. He pointed to the US national debt surpassing $40 trillion, with investors increasingly favoring scarce assets like gold, the Swiss franc, and Bitcoin as insurance. Bucella noted that the failure of the Digital Asset Market Clarity Act in the Senate had only a short-lived impact, with Bitcoin ETF inflows rebounding to roughly $1 billion in a single day. He also highlighted growing onshore lending products for Bitcoin, which reduce the need for holders to sell. He cautioned that Bitcoin remains a risk asset overall, but its price is increasingly being tied to debasement risk rather than legislative timelines.

Researchers at East Texas A&M University have published PQLN, the first working post-quantum security layer for Bitcoin's Lightning Network. Released on September 12, 2026, the nearly 11,000-line codebase, forked from rust-lightning, is available on GitHub. It adds lattice-based cryptography (ML-DSA and ML-KEM) to five critical Lightning operations, while remaining compatible with legacy nodes. Benchmarks show added operations take under 0.33 milliseconds, though gossip downloads increase by roughly 10x (reducible to about 4x with the Falcon signature scheme). Interoperability tests across all 12 mixed-node scenarios reported zero stuck payments. Notably, PQLN only secures communication and routing layers, not channel funds or on-chain elements, as changing Bitcoin's base layer would require a consensus upgrade.

U.S. bitcoin ETFs saw nearly $1 billion in new investments on Monday, the largest daily inflow since October, according to Farside Investors data. The surge comes as bitcoin's price rose about 13% over the past week to around $86,500, with analysts citing cooling AI stocks and a U.S. Treasury liquidity move as catalysts. BlackRock's fund led with $381.4 million in inflows. CryptoQuant reported bitcoin crossed its 365-day moving average, signaling the end of a bear market.